The Government of Uzbekistan, The Islamic Development Bank and a pool of Saudi investors partnered to establish the first ever Economic Empowerment Fund of Uzbekistan (“EEFU” or “the Fund”). The EEFU had been soft launched during the latest IsDB annual meeting in Tashkent (1-4 September 2021) and a steering committee has been to finalize remaining arrangements for official start of operations.
The EEFU is by essence, an enabling platform for providing financial and non-financial support for the development of local MSMEs, social entrepreneurs and Cooperatives. The Fund will foster widespread economic empowerment in Uzbekistan by targeting the bottom of the economic pyramid through involving the marginalized populations in productive projects across entire value chains locally. Fundamentally, the strategy of the Fund is geared toward a double bottom line mandate of achieving a balanced structure between developmental impact and financial sustainability.
With an initial target size of USD 100 million to be gradually increased to USD 500 million, the EEFU will mainly intervene through a blended asset classes to efficiently channel the proceeds to the target end-users including, Line Finance, direct Murabaha financing and Equity investment.
In order to pave the way for a successful implementation, the Fund has been structured following international best practices and standards and will be managed by a reputable Fund Manager (FM) with international experience backed with a successful track record in managing impacts funds. Furthermore, the Fund will be equipped with an annexed Technical Assistance (TA) facility to bring additional support and address major capacity constraints faced by prospective beneficiaries.
The EEFU will merely complement the efforts of the Government of Uzbekistan for job creation and poverty alleviation with over 102,000 direct job opportunities expected to be created through providing support to more than 34,000 MSMEs, Social Entrepreneurs and Cooperatives of which at least 50% will target Women and Youth led enterprises.
Moreover, the fund will further foster development of local value chains in various sectors and connect them to the international value chains, resulting then in more value addition for local producers.